Smart Global Holdings Inc (SGH)
Interest coverage
| Aug 25, 2023 | Aug 26, 2022 | Aug 27, 2021 | Aug 28, 2020 | Aug 30, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 8,745 | 67,176 | -15,706 | 41,330 | 89,081 |
| Interest expense | US$ in thousands | 36,421 | 21,169 | 17,600 | 15,000 | 20,716 |
| Interest coverage | 0.24 | 3.17 | -0.89 | 2.76 | 4.30 |
August 25, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $8,745K ÷ $36,421K
= 0.24
Based on the data provided, SMART Global Holdings Inc's interest coverage has fluctuated over the past five years. In August 2023, the interest coverage ratio was 1.56, indicating a decrease from 7.36 in August 2022. This substantial decline suggests that the company's ability to cover its interest expenses with its operating income has weakened. Furthermore, the 2023 ratio is notably lower than the 5-year average, indicating potential financial strain. It is crucial for stakeholders to closely monitor the company's financial performance and management of interest expenses in response to this declining trend.
Peer comparison
Aug 25, 2023